By DANA SMITH
Tribune Staff Reporter
dsmith@tribunemedia.net
THE government hopes to lower the cost of electricity with “far reaching”, widespread changes at the Bahamas Electricity Corporation that include the creation of two new companies in partnership with the private sector.
Prime Minister Perry Christie said in a statement last night that the goal is to be “negotiating the necessary agreements with a view to signing contracts” with partners, by the end of the year.
“Today my Government will be issuing a Request for Proposals to seek a partner or partners to assist us in turning around our energy sector,” he said. “Our objective is to realign BEC, and to create efficiencies which will allow for significant reductions in the cost of energy, increased energy security, environmental responsibility, reliability, and increased competitiveness as a country.”
One of the government’s “critical initiatives”, Mr Christie said, is to find ways to reduce the cost of electricity and move towards cleaner burning and more efficient fuels supplemented by renewable energy.
Such “far reaching reforms”, the prime minister said, require the financial support, operational experience and innovation of the private sector.
“It is our intent to create two new BEC entities into which the relevant assets, liabilities and operations of the Bahamas Electricity Corporation will be transferred,” he said.
The first is a new Transmission and Distribution company that will be “wholly owned” by BEC. This company will be responsible for the operation, maintenance, repair, and expansion of electricity transmission and distribution systems, Mr Christie said, as well as for billing, collection, customer services and other relevant services across the Bahamas.
The second company will be a new Generation Services company. This company will be responsible for the operation, maintenance, repair, financing of BEC’s current electricity generation facilities and certain other assets located across The Bahamas, as well as the development of new power generation plant.
Mr Christie said this company will enter into a Power Purchase Agreement with the new Transmission and Distribution company.
The government is seeking to identify “financially and operationally credible parties or consortiums” to operate these new companies and will be publishing notices in the Bahamas as well as in the world press.
“It is our intent to enter into management agreements with the successful party, or parties, to operate the two new companies, and in the case of the new generation company, a management agreement and/or a Joint Venture Agreement,” Mr Christie said.
“Our new partners will be expected to assist the Government in transitioning the relevant assets, liabilities, operations and personnel from BEC to the new companies, and to assist the Government in driving performance improvement and upgrading the various systems to the highest standards.
“We are also keen to see Bahamian participation in the process, be it as part of a consortium or ultimately taking part in an IPO of one or both of the companies.”
Also on the table, Mr Christie said, is to introduce renewable energy.
He explained before the country can embark on any new, significant renewable energy based opportunities, the “core energy infrastructure” needs to be in order.
“This means realigning BEC and introducing the appropriate regulatory reforms, and ensuring that we are technically ready to receive renewable energy without destabilizing our electric grids,” he said.
“We intend to work on regulatory reform with a view to completing this by early 2014.”
The government is also “committed to advancing a Residential Energy Self Generation programme” to be implemented by mid-2014, with a goal of meeting up to 10 per cent of the country’s power needs over time.
By 2030, Mr Christie said, he would like to see 30 per cent of the sector’s power generation come from renewable energy sources.
He added that a requirement is being made of future partners to “specifically address” how they will make Family Island and Grand Bahama power generation more efficient.
“A reform of this nature is absolutely fundamental to the future of the Bahamas,” Mr Christie said, before adding: “I recognize that with such major change, there is bound to be much uncertainty for many stakeholders.”
Those stakeholders include BEC staff, residential and commercial consumers, service providers and BEC suppliers “who may be worried about losing BEC’s business,” and environmentalist, Mr Christie said.
The government has retained KPMG Advisory Services, “along with other technical and legal advisors” to assist with the reform, Mr Christie said.
“For the staff of BEC, you can be certain that in our negotiations with bidders we will be insisting on fair treatment for all, and fully expect there will be no job losses as a result of this process,” he continued.
“We will also be insisting on investment in training and retraining programmes where new technology is being implemented. Liberalization of the energy sector will also create many new business opportunities.”
And for the environmentalist – “which I suspect is almost all of us,” Mr Christie said – new partners will be asked to assist with cleaning up the damage done to Clifton Pier.
The government is looking to bidders to propose the most “energy efficient and environmentally responsible solutions they can,” the prime minister said.
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- TOUGH CALL: Government in a rush to reform the energy sector
- 'Universal service' for Out Islands post BEC restructuring
Comments
Reality_Check 11 years, 3 months ago
Bahamian taxpayers will be stuck with the much higher costs of the BEC owned "Transmission and Distribution company" whereas the favoured business cronies of Perry Christie and the PLP will end up owning the "Generation Services company" which will have a sweet profiteering Power Purchase Agreement with BEC. Christie has in fact already decided who will be his anointed lucky investors in the "Generation Services company". KPMG should be ashamed of its own profiteering role in this restructuring of the country's electrical system that will shove unsustainable costs on to the already overloaded backs of Bahamian taxpayers!
All of the proposals thus far put to Government are quite glaring in terms of the greed of the investors behind them as evidenced by their keen desire not to acquire BEC through a Government supported privatization initiative. The investors behind each of the proposals received to date would love a "sweet profiteering" arrangement that leaves BEC and Bahamian taxpayers on the hook for the high cost of the country's electrical distribution system (covering many islands), BEC's unfunded pension liabilities, etc. etc. The eventual outcome of putting only the electrical generating plants in the hands of these investors, with a "sweet deal" contract on the back of an already financially troubled BEC, is all too obvious: BEC would soon go belly-up leaving Bahamian taxpayers saddled with funding its unsettled liabilities, and the less costly parts of its electrical distribution system would be picked up at a fire sale price by the private plant owners.
The arrangement between Water & Sewerage Corp and Consolidated Water is a classic example of why these types of deals fail.
TalRussell 11 years, 3 months ago
PM the breaking up of BC will place even more thousands of Bahamalanders in poverty. How can you jump to BEC, when your administration and Comrade Frankie is still stuck in BTC negotiation mode, or has that to ended where you began? Comrade taxpayers, it's not who will own BEC, that's the main issue. It's the complete lack of respect for anything taxpayers own in Bahamaland. It's not just a PLP thing. What we need is to revamp who we elect to the House. The thinking must start today about who we will elect in 2017. This may be the only solution when it comes to MP's respecting taxpayers. We must not allow MP's to be hiding behind their respective party's coattails. What a relief it would be to witness for the first time, men and women, not hiding behind some PM or party leaders coattails. Instead of pulling strings for close party associates and foreigners, they might actually advance to tending to the needs of ALL Bahamians. MP's who's first and last steps will not be all about advancing their own political careers and family interests. MP's who will not duck their constituents, after they're elected to the House. MP's who do understand that ANY individual who got their Bahamaland Citizenship, through the backdoor will be asked to leave Bahamaland, through the front door. Let it send a firm message to all, that we will revoke your citizenship, if you don't go through the proper process, like everyone else. That never will we allow any government to pass a law, that will automatically grant Citizenship to anyone, just because your mommy was on Bahamaland's soil, when it was your time to pop out her belly. Bahamalanders have gotten this far through our unique economic spirits. Unfortunately, it's still the politically connected that seem be the only ones getting richer. Getting richer seems to work well for some, regardless if under a PLP or red shirts regime. Politicians have no damn right to be selling things owned by Bahamalanders. Comrades be thinking today, for 2017, with a by election or two thrown in for sending the PM some loud warning messages. We have not for years now been getting the best for the children of Bahamalanders? How long will they take our shorelines, whilst we stand and look at the padlocked gates? Not go'in happen under this Comrade's watch. This can only remain our Bahamaland, if we stand up ... to project her. One PLP by election loss will scare the hell out of the entire PLP/red shirts political organizations.
Amen!
banker 11 years, 3 months ago
I agree to most of what you are saying. I don't think that Citizenship is an issue. It's a well known precept around the world that you get automatic citizenship where ever you popped out of your mother's uterus. I have many Bahamian friends that I have that took their pregnant wives to the US to have babies just to make life easier for the children in the future.
However, in regards to your comments about the broke political systems, I agree. However, I cannot see a way out of it personally, with one exception. The Bahamas will sink to rock bottom and become a country like Jamaica was during the anarchy and violence. There will not be a political will to change things, because the politicians line up to win elections and line the pockets of themselves and their cronies. Anyone who wants to change the system will not be voted in.
Do you remember the KB song Civil Servant? They got their job from their MP. They start work whenever they reach. This is system is so embedded and ingrained that any reformist would not even win a seat.
There are difficult and hard times for the Bahamas. The economic slide is not over. The endemic 20% unemployment will grow. Already Bahamian businessmen (and not just the white knights) are looking for ways to convert their assets to American dollars and stash them offshore from the Bahamas. They have many schemes and all of them involve intermediate entities that add to the cost of goods. Ordinary Bahamians pay the price.
I am sad afraid that we must hit rock bottom before anything changes. And that event will bring misery to many, many Bahamians. But we will not elect someone who will change things for the better of the Bahamas. Our brethren are too easily bought with cash, hams, rent payments etc at election time, and so the march to doom continues.
justthefactsplease 11 years, 3 months ago
Why doesn't the goverment look at allowing Net Metering so that home or business owners who choose can use solar to generate electricty for the BEC grid and pay BEC the difference between usage and production or vice versa. This will reduce BEC capital output for fuel and generating capacity as well as maintenance of these units.
concernedcitizen 11 years, 3 months ago
b/c them and their buddies can,t make fortunes doing that ,,how is a company going to make power ,sell it to over staffed ,unfunded pension BEC ,and then sell it to us cheaper ,,is BEC that ineffiecent at makimg power ,or that overstaffed ,,
banker 11 years, 3 months ago
Sigh ... another Bluewater again and PLP cronyism.
TalRussell 11 years, 3 months ago
Comrade Banker your assumption that it is common to automatically become a citizen in the country were you just happen to be born is a wrong assumption. How many more babies can Bahamaland afford to born. That is the question. We are not some massive country to be granting automatic citizenships. The message done gotten to thousand of nationals of various countries, that all you have to do is land here and have your babies and wait for citizenship. Never in any other time in our entire history have parents left their homeland with their little children to be smuggled into Bahamaland. Babies are born every day in Bahamaland but it was never intended for pregnant women who are here illegally. Comrade Banker I am asking serious questions, not making assumptions. Is there any reason for these mothers-to-be, being allowed to illegally live-in Bahamaland? To me this is not about some color of your skin issue. An illegal baby is an illegal baby, no matter where the homeland is. Same thing to me, if they be born under a "turn-a-blind-eye Christie or Ingraham government.
concernedcitizen 11 years, 3 months ago
we made 50,000 of our babies in the last decade ,,us bahamians ,,
TalRussell 11 years, 3 months ago
Comrades sure sounds like advance PR for what will develop into a "Electricity Cartel.” Solid evidence before us, why we urgently need an independent "watchdog" to keep a close eye on what the government of the day, is up to. This can't be the same Christie, that was so against Hubert's sell-off of BTC? My, my how power changes people.
concernedcitizen 11 years, 3 months ago
how can 2 companies make money and sell us power cheaper ,,is BEC that inept ,,sell the friggin thing and privatize it ,and not to the snake ,everyday the PLP become creepier ,,it scared them being out of power and this is there great money grab ,,,my God hows does PGC say this sh##t w/ a strait face ,,,,,,,,,,,,,,,,
Reality_Check 11 years, 3 months ago
Just look at Perry "Vomit" Christie's pointed ears.....yep, definitely the Devil incarnate!
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